Under the 1982 guidelines, would the Fed approve the merger of Banks A and C?
A)It is likely to approve because it is not a concentrated market.
B)It is unlikely to approve because the post-merger HHI has increased by over 100.
C)It is likely to approve because the post-merger HHI has increased by over 100.
D)Likely to approve because the post-merger HHI has increased by less than 5,000.
E)It is unlikely to approve because the post-merger HHI has increased by an amount over 5,000.

Question

Quizplus · Accepted Answer

The post-merger HHI has increased by over 100, which indicates that the market has become more concentrated. According to the 1982 guidelines, a merger that results in a post-merger HHI increase of more than 100 is presumptively anticompetitive and likely to be challenged by the DOJ or the FTC. Therefore, it is unlikely that the Fed would approve the merger of Banks A and C.

Under the 1982 Guidelines, Would the Fed Approve the Merger